2014 is expected to be another big year for tablets and Apple Inc. (NASDAQ:AAPL). Research firm Canalys predicts tablets will take over nearly half of all personal computer shipments next year. The entire PC market grew 18% year over year in the third quarter which includes tablets.
Profits stable even after market share declines
It is predicted the tablet leader will lose market share thanks to competition from Android, yet keep their share of profits. Tim Coulling (senior analyst for Canalys) explained, “Apple’s decline in PC market share is unavoidable when considering its business model. Samsung narrowly took the lead in EMEA this quarter and Apple Inc. (NASDAQ:AAPL) will lose its position to competitors in more markets in the future. However, Apple Inc. (NASDAQ:AAPL) is one of the few companies making money from the tablet boom. Premium products attract high value consumers; for Apple, remaining highly profitable and driving revenue from its entire ecosystem is of greater importance than market share statistics.”
Last month, Apple Inc. (NASDAQ:AAPL) introduced two new tablets including the iPad Air and the iPad Mini with Retina display. The company’s place in the market is stable. Apple Inc. (NASDAQ:AAPL) sold 14.1 million iPad tablets, a significant number compared to the 4.6 million Macs they sold this quarter. Canalys also estimates a total of 285 million tablets shipped in 2014 and 396 million tablets shipped in 2017.
Cheaper Android tablets to compete
Another thing that could possibly shift the tablet market is the influx of cheaper Android tablets. James Wang (another analyst for Canalys) added, “Vendors such as Acer, Asus, HP, and Lenovo have all entered the price war, with entry-level products at sub-$150 price points. With vastly different cost structures these vendors will continue to find it extremely challenging to keep pace with local competition.”
As for Windows, Canalys predicts Microsoft Corporation (NASDAQ:MSFT) will grow in the tablet market but just barely. It’s estimated the personal computer giant will take 5% of the market in 2014.